http://www.sacbee.com/content/sports/story/10727922p-11646381c.html
Kings reach out to Valley
Comcast TV deal sets the stage for acquiring new fans in one of the fastest-growing regions of the state.
By Clint Swett and J. Freedom du Lac -- Bee Staff Writers
Published 2:15 am PDT Monday, September 13, 2004
When most people look north and south from Sacramento, they see a broad valley dotted with farms and orchards.
But from the third-floor suites at Arco Arena, executives at Maloof Sports & Entertainment see a potential bumper crop - new Kings fans who could help bolster the team's bottom line for years to come.
By cementing a deal last week with Comcast Cable to broadcast 58 games from Chico to Fresno on a new sports network, the Kings achieved a number of goals. They restarted a revenue stream that was cut off when the team's cable deal with Fox Sports expired after the 2002-03 NBA season. They pacified their local fans frustrated by a paltry TV schedule last season.
Perhaps most importantly, the Kings laid the foundation for what they hope will be a rabid fan base in what is expected to be California's fastest-growing region during coming decades.
"The further you go from Arco Arena, the fewer people can attend games," said John Thomas, president of Maloof Sports.
"So TV is an extension of the arena. Instead of having 17,317 fans see a game, we can have 1,017,317."
He may be understating the case.
According to the California Department of Finance, by 2020 the 19-county Central Valley will be more populous than the Bay Area.
By 2050, the population of the Central Valley will grow to 11.4 million, said Richard Cummings, communications director for the Great Valley Center, a Modesto-based public policy organization.
"The (TV deal) is a recognition of the Valley's growing prominence," Cummings said. "There are plenty of opportunities for the Kings if they want to build fan loyalty."
Maloof Sports certainly sees it that way. The Kings' radio network has included a Fresno station for the past two years, and Thomas said the team hopes to expand its Spanish-language broadcasts to stations up and down the Valley this season.
In a further nod to the Valley, the team will play a preseason game against the Los Angeles Lakers at Fresno's new Save Mart Center next month.
While few of the newly converted fans would buy tickets for the already sold-out games at Arco, their enthusiasm could pay off in other ways.
The Kings will get an undisclosed fee from Comcast to broadcast the games as part of a new regional sports network.
Kings merchandise - from $12 lanyards to $79 Mike Bibby jerseys - might become hot items along the Highway 99 corridor.
More fans might trek to Sacramento to attend concerts or other events at Arco.
But the biggest dividends likely will come from "partner" companies like Pepsi, McDonald's, Southwest Airlines and the Maloofs' own Palms Casino Resort, which pay hefty sums for ads on Kings television and radio broadcasts, signs at Arco Arena and various in-store promotions with the team.
By extending their reach from Chico to Fresno, the Kings potentially can charge more for these partnerships.
"Our belief is that if we can get fans to feel closer to the team (via television), then our partners can interact with the fans and turn them into customers," Thomas said.
Some might wonder how difficult it will be to woo fans wedded to Bay Area or Southern California teams.
That shouldn't be a major issue, said Perry Wong, who follows Central Valley issues as a senior economist at the Milken Institute.
"People in the Valley lean more toward Sacramento than they do L.A. They feel more connected to Sacramento," Wong said. "The Valley is a natural extension for the franchise. It's almost a perfect place to build a base."
The Valley presents its challenges, too. Largely rural and heavily populated by seasonal farm workers, the Stockton, Modesto, Merced and Fresno areas have lower per-capita incomes than Appalachia, said Cummings of the Great Valley Center.
But Joel Kotkin, a senior fellow at the New America Foundation who studies and writes about Valley issues, said the region is slowly becoming more urbanized with a rapidly growing middle class. "It's smart of the Kings to try to establish a presence there," he said.
It's also a sensible move by the Kings to have inked a deal with Comcast after the team's cable rights collected nothing but dust for a full season, said John Higgins, deputy editor at Broadcasting & Cable.
"Television rights are lifeblood for pro teams," he said. "They're vital. It's a make-or-break financial deal in a business that's not much of a business."
The deal may not be quite so critical for Comcast, whose corporate president had publicly pooh-poohed the idea of a regional Sacramento sports network as recently as six months ago. But the cable giant still stands to gain plenty from its new partnership - and not just in advertising revenue and the branding bump that business analysts say is sure to come.
For one thing, Comcast's new network will offer Kings home games in high definition, which could inspire a significant percentage of Comcast's 770,000 Valley customers to upgrade from analog cable to the more expensive digital service. (Starting early next year, digital Comcast subscribers will also be able to use a video-on-demand feature to replay all or parts of recent games.)
"The money is to be made by having these games in high definition so people will upgrade to digital and pay a higher fee," said John Mansell, a TV sports analyst at Kagan Research.
There are also the programming fees, which could be worth several million dollars in each of the 10 years of Comcast's contract with the Kings.
While the Valley's dominant pay-TV provider won't actually charge itself to carry the new sports network - which doesn't yet have a channel position, a start date or even a name - it will make its competitors pay for the privilege.
Joseph Gamble, Comcast's regional vice president, wouldn't say what the company plans to charge for the channel, which is expected to include zoned high school and college sports (meaning Fresno-area viewers might see Fresno State athletics at the same time that Stockton viewers are watching the University of the Pacific).
But Broadcasting & Cable's Higgins said regional sports network fees - paid by the cable and satellite companies - are generally between $1.60 and $2.50 per subscriber per month. And according to Daily Variety, Comcast is charging about $3 per subscriber for the new regional sports network launching Oct. 1 in Chicago.
While neither DirecTV nor DISH Network has signed a deal to add Comcast SportsNet Chicago, representatives for the two major satellite operators said last week that they were still negotiating to pick up the programming.
Both DISH Network and DirecTV already carry Comcast's Washington, D.C.-Baltimore sports network; along with the cable operators competing with Comcast here, both are eyeing the Central Valley channel, too.
"We're interested in the channel and would like to invite a proposal on reasonable economic terms," said Kelley Baca, spokeswoman for DISH Network.
Said Bob Marsocci of DirecTV: "We look forward to the opportunity to sit down with Comcast and see if we can come to an agreement that we think is fair and reasonable."
Marsocci said it was "likely" that DirecTV would offer the Comcast channel, but added, "It really is premature for me to say whether we definitively will."
If they do, Broadcasting & Cable's Higgins doubts that DirecTV will pay Comcast anything close to what the cable giant is likely to receive for its Chicago channel.
In that market, Comcast is carrying four major pro teams - the Cubs, Bulls, White Sox and Blackhawks.
In this market, where ratings are concerned, it's likely to be the Kings ... followed by a long, quiet summer. "This is basically a part-time network with one good pro sport - and that's it," Higgins said. "It will be hard for Comcast to get full dollar for this thing."
Kings reach out to Valley
Comcast TV deal sets the stage for acquiring new fans in one of the fastest-growing regions of the state.
By Clint Swett and J. Freedom du Lac -- Bee Staff Writers
Published 2:15 am PDT Monday, September 13, 2004
When most people look north and south from Sacramento, they see a broad valley dotted with farms and orchards.
But from the third-floor suites at Arco Arena, executives at Maloof Sports & Entertainment see a potential bumper crop - new Kings fans who could help bolster the team's bottom line for years to come.
By cementing a deal last week with Comcast Cable to broadcast 58 games from Chico to Fresno on a new sports network, the Kings achieved a number of goals. They restarted a revenue stream that was cut off when the team's cable deal with Fox Sports expired after the 2002-03 NBA season. They pacified their local fans frustrated by a paltry TV schedule last season.
Perhaps most importantly, the Kings laid the foundation for what they hope will be a rabid fan base in what is expected to be California's fastest-growing region during coming decades.
"The further you go from Arco Arena, the fewer people can attend games," said John Thomas, president of Maloof Sports.
"So TV is an extension of the arena. Instead of having 17,317 fans see a game, we can have 1,017,317."
He may be understating the case.
According to the California Department of Finance, by 2020 the 19-county Central Valley will be more populous than the Bay Area.
By 2050, the population of the Central Valley will grow to 11.4 million, said Richard Cummings, communications director for the Great Valley Center, a Modesto-based public policy organization.
"The (TV deal) is a recognition of the Valley's growing prominence," Cummings said. "There are plenty of opportunities for the Kings if they want to build fan loyalty."
Maloof Sports certainly sees it that way. The Kings' radio network has included a Fresno station for the past two years, and Thomas said the team hopes to expand its Spanish-language broadcasts to stations up and down the Valley this season.
In a further nod to the Valley, the team will play a preseason game against the Los Angeles Lakers at Fresno's new Save Mart Center next month.
While few of the newly converted fans would buy tickets for the already sold-out games at Arco, their enthusiasm could pay off in other ways.
The Kings will get an undisclosed fee from Comcast to broadcast the games as part of a new regional sports network.
Kings merchandise - from $12 lanyards to $79 Mike Bibby jerseys - might become hot items along the Highway 99 corridor.
More fans might trek to Sacramento to attend concerts or other events at Arco.
But the biggest dividends likely will come from "partner" companies like Pepsi, McDonald's, Southwest Airlines and the Maloofs' own Palms Casino Resort, which pay hefty sums for ads on Kings television and radio broadcasts, signs at Arco Arena and various in-store promotions with the team.
By extending their reach from Chico to Fresno, the Kings potentially can charge more for these partnerships.
"Our belief is that if we can get fans to feel closer to the team (via television), then our partners can interact with the fans and turn them into customers," Thomas said.
Some might wonder how difficult it will be to woo fans wedded to Bay Area or Southern California teams.
That shouldn't be a major issue, said Perry Wong, who follows Central Valley issues as a senior economist at the Milken Institute.
"People in the Valley lean more toward Sacramento than they do L.A. They feel more connected to Sacramento," Wong said. "The Valley is a natural extension for the franchise. It's almost a perfect place to build a base."
The Valley presents its challenges, too. Largely rural and heavily populated by seasonal farm workers, the Stockton, Modesto, Merced and Fresno areas have lower per-capita incomes than Appalachia, said Cummings of the Great Valley Center.
But Joel Kotkin, a senior fellow at the New America Foundation who studies and writes about Valley issues, said the region is slowly becoming more urbanized with a rapidly growing middle class. "It's smart of the Kings to try to establish a presence there," he said.
It's also a sensible move by the Kings to have inked a deal with Comcast after the team's cable rights collected nothing but dust for a full season, said John Higgins, deputy editor at Broadcasting & Cable.
"Television rights are lifeblood for pro teams," he said. "They're vital. It's a make-or-break financial deal in a business that's not much of a business."
The deal may not be quite so critical for Comcast, whose corporate president had publicly pooh-poohed the idea of a regional Sacramento sports network as recently as six months ago. But the cable giant still stands to gain plenty from its new partnership - and not just in advertising revenue and the branding bump that business analysts say is sure to come.
For one thing, Comcast's new network will offer Kings home games in high definition, which could inspire a significant percentage of Comcast's 770,000 Valley customers to upgrade from analog cable to the more expensive digital service. (Starting early next year, digital Comcast subscribers will also be able to use a video-on-demand feature to replay all or parts of recent games.)
"The money is to be made by having these games in high definition so people will upgrade to digital and pay a higher fee," said John Mansell, a TV sports analyst at Kagan Research.
There are also the programming fees, which could be worth several million dollars in each of the 10 years of Comcast's contract with the Kings.
While the Valley's dominant pay-TV provider won't actually charge itself to carry the new sports network - which doesn't yet have a channel position, a start date or even a name - it will make its competitors pay for the privilege.
Joseph Gamble, Comcast's regional vice president, wouldn't say what the company plans to charge for the channel, which is expected to include zoned high school and college sports (meaning Fresno-area viewers might see Fresno State athletics at the same time that Stockton viewers are watching the University of the Pacific).
But Broadcasting & Cable's Higgins said regional sports network fees - paid by the cable and satellite companies - are generally between $1.60 and $2.50 per subscriber per month. And according to Daily Variety, Comcast is charging about $3 per subscriber for the new regional sports network launching Oct. 1 in Chicago.
While neither DirecTV nor DISH Network has signed a deal to add Comcast SportsNet Chicago, representatives for the two major satellite operators said last week that they were still negotiating to pick up the programming.
Both DISH Network and DirecTV already carry Comcast's Washington, D.C.-Baltimore sports network; along with the cable operators competing with Comcast here, both are eyeing the Central Valley channel, too.
"We're interested in the channel and would like to invite a proposal on reasonable economic terms," said Kelley Baca, spokeswoman for DISH Network.
Said Bob Marsocci of DirecTV: "We look forward to the opportunity to sit down with Comcast and see if we can come to an agreement that we think is fair and reasonable."
Marsocci said it was "likely" that DirecTV would offer the Comcast channel, but added, "It really is premature for me to say whether we definitively will."
If they do, Broadcasting & Cable's Higgins doubts that DirecTV will pay Comcast anything close to what the cable giant is likely to receive for its Chicago channel.
In that market, Comcast is carrying four major pro teams - the Cubs, Bulls, White Sox and Blackhawks.
In this market, where ratings are concerned, it's likely to be the Kings ... followed by a long, quiet summer. "This is basically a part-time network with one good pro sport - and that's it," Higgins said. "It will be hard for Comcast to get full dollar for this thing."
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